The March producer price index rose a hefty 1.0 percent overall but only 0.1 percent at the core, which excludes the volatile food and energy components. The PPI was expected to have risen by 0.5 percent overall and 0.2 percent at the core.

"Rocketing gasoline prices -- as well as much more modest increases in electricity and natural gas prices -- explain the huge rise in the headline index. It will begin to reverse next month, reflecting the recent sharp falls in wholesales gasoline prices," said Ian Shepherdson. chief U.S. economist at High Frequency Economics.

In addition, March retail sales climbed 0.4 percent overall and 1.4 percent when excluding autos. It was expected to have risen 0.3 percent overall and 0.6 percent at the core. View and .

Meanwhile, a slew of earnings reports were unleashed Thursday.

Dow-component General Electric
GE, -0.72%
checked in with a first-quarter profit of 78 cents a share, 1 cent ahead of the First Call estimate. The stock ended off 4 7/8 to 156 3/4 on Wednesday.

Dow-component Honeywell
HON, -0.40%
registered a first-quarter profit of 63 cents per share, a penny ahead of the First Call estimate. Shares fell 3 3/16 to 52 7/8 on Wednesday.

And Dow-component General Motors
GM, -0.10%
posted first-quarter earnings of $2.80 per share, handily beating the First Call estimate of $2.66 a share. Shares ended up 1/16 to 87 1/2 ahead of the news.

Advanced Micro Devices shares jumped 11 1/4 above Wednesday's NYSE close to 74 1/2, according to Madoff Investment Securities. See Indications. Late Wednesday
AMD, -1.27%
the company registered first-quarter earnings of $1.15, blasting past the First Call estimate of 58 cents a share. See full story.

Ariba
arba
shares rose 7 1/2 to 79 1/2. Late Wednesday, the company reported a loss of 6 cents a share in the second quarter compared to the First Call estimate projecting a loss of 8 cents a share.

Rambus shares fell 14 13/16 to 199 in Instinet trading before the official start of trading even as it checked in with positive earnings. After the close Wednesday, in fact, the company
RMBS, +0.85%
posted a second-quarter profit from operations of 15 cents a share, beating the First Call estimate by a penny.

In the bond market, prices extended losses by a touch following the release of some stronger-than-expected economic data. Still, the reaction remained generally muted. The 10-year Treasury note fell 23/32 to yield
TNX, +0.41%
6.01 percent while the 30-year bond lost 22/32 to yield
TYX, +0.36%
5.86 percent.

Separately, Fed Chair Alan Greenspan will speak before the Senate Banking Committee on the future of securities markets Thursday morning. In the currency market, dollar/yen was recently trading at 105.83, inching up 0.1 percent from the previous close, while euro/dollar edged down 0.3 percent to 0.9563.

Wednesday's trading activity

The Nasdaq suffered its second largest point decrease in history Wednesday as sellers pounded technology stocks with a vengeance. The tech-packed index is now off 7.4 percent for the year and close to its intra-day low of 3,649 set on April 4.

"This week we've lost the support of the large-cap tech stocks. We've lost support from Sun, Oracle, Dell, Intel and even Cisco Systems -- they were the last to come under pressure," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum. And Cisco, Microsoft, Sun Microsystems, Oracle, Intel and Dell were among the top volume leaders on the Nasdaq Wednesday.

"The saying is that once the blue-chips drop, you're near the end. That could be the case," Hyman opined. However, he added, it will take time before the market's confidence in tech stocks is restored.

"[Tech] valuations are being scaled back across the board -- both in the companies with earnings and those without earnings," Hyman said.

In the broader market, bank stocks saw the best buying interest thanks to rosy earnings results from J.P. Morgan. Oil service, utility and stocks were also higher while , biotech and airline shares sagged. In the tech arena, , hardware, chip and issues took a hit.

The Dow Industrials
DJIA, -0.05%
ended off 161.95 points, or 1.4 percent, to 11,125.13 after rising as much as 138 points earlier in the session.

The blue-chip barometer -- in the black for most of the session -- was dragged down in late afternoon trading by its tech components -- Hewlett-Packard, Intel, IBM and Microsoft. Upside leaders were Procter & Gamble, DuPont and Boeing.

"The damage to the new economy stocks is distracting investors from the renewed strength in the old economy issues, and while their uptrends may not be as strong as the dotcoms, they could be much longer-lasting," said Robert Dickey, chief technical strategist at Dain Rauscher & Co.

The Nasdaq Composite
$compq
plunged 286.27 points, or 7.1 percent, to 3,769.63. It's the index's first close below 4,000 since Jan. 31. (See 1-year chart for Nasdaq and Dow.)

Hyman said Wednesday's tech tumble may elicit margin calls, which could exacerbate an already touchy situation in the next days.

With money rotating so quickly from sector to sector, a sharp rebound in the Nasdaq wouldn't be unexpected, Hyman said. However, he added, rallies will be very discriminating as money will initially flow into the established tech stocks.

Tom Peterson, publisher of the newsletter Bulls Eye Research, believes that until there's a confirmation of the Nasdaq's lows, buyers will just be trying to pick a bottom -- which entails greater risk but also potentially better rewards.

Diceky said the best buy point for tech stocks won't be in place until they've bottomed and based for a period of a few months -- not just days. In the near-term, he believes the drug, food, retail, healthcare and other manufacturing sectors will rule on the upside.

The reduction in revenue estimates, Goldman analyst Rick Sherlund said, will shave about 2 cents in earnings per share, which may likely be offset by gains in the investment portfolio and thus does not result in earnings-per-share changes. Microsoft remains on Goldman's recommended list. Shares of Microsoft
MSFT, +0.00%
shaved 4 1/2 to 79 3/8.

In addition, an earnings warning from Compuware added to the market's anxiety. The company
CPWR, -60.00%
said it expects a profit from operations of 13 to 15 cents per share in the fourth quarter, well below the First Call estimate of 35 cents per share, citing revenue weakness from its professional services and products divisions. Shares tumbled 8 1/8, or about 40.5 percent, to 11 15/16. See full story. Banc of America, Robertson Stephens and J.P. Morgan downgraded Compuware to a "market performer" from a "buy" rating. And CS First Boston downgraded the stock to a "hold" from a "buy." See Rating Revisions.

Shares of Motorola
MSI, -0.57%
continued their descent, falling 8 to 116 on the heels of an 18 percent decline on Tuesday.

Volume came in at 1.16 billion on the NYSE and at 1.92 billion on the Nasdaq Stock Market. Winners beat losers by 15 to 14 on the Big Board while decliners bested advancers by 33 to 10 on the Nasdaq.

Meanwhile, a flurry of earnings reports hit the market Wednesday.

J.P. Morgan
JPM, -0.45%
checked in with first-quarter earnings of $3.37 per share, handily beating the First Call estimate of $2.81. Shares climbed 1 15/16 to 136 11/16. See story.

E-Trade
EGRP, -0.46%
broke even on a per share basis in the second quarter compared to the First Call estimate of a loss of 16 cents per share. The stock shed 11/16 to 22 3/4. View full story.

In other earnings news, Time Warner
TWX, -0.28%
posted a first-quarter profit from operations of 5 cents per share, beating the First Call estimate of 2 cents per share. The stock fell 5 3/4 to 90. Read story.

Dow Jones
dj
posted a first-quarter profit from operations of 88 cents per share, beating the First Call estimate of 80 cents per share. The stock added 1/4 to 72 1/8. See full story.

On the economic front, Wednesday saw the release of March import prices, up 0.3 percent, and export prices, which gained 0.4 percent.

In the currency arena, dollar/yen was recently trading at 105.85, off 1.0 percent from the previous close, while euro/dollar inched down 0.1 percent to 0.9580.

The Bank of Japan released an optimistic assessment of the Japanese economy in its April report, which boosted the dollar. The BOJ said improvements in the economy are becoming distinct and that a recovery is being detected in some areas of private demand. See full story.

Meanwhile, comments from Bank of Japan Governor Masaru Hayami suggesting that the central bank's zero interest rate policy -- in place since Feb. 1999 -- may soon be abandoned created some waves in the market. Still, Hayami said the BOJ would not change its current policy stance unless it was clear that the income environment stopped deteriorating.

In the commodity arena, May crude climbed $1.36 to $25.50 while the Bridge CRB index rose 2.46 to 210.75. View latest commodity prices.

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